Utilities play a key role in economic development

Infrastructure is a crucial element for development of rural South Carolina. Nowhere is there more concern about infrastructure and the development it can bring than among people in the business of selling electricity.

In rural South Carolina, South Carolina’s 20 electric cooperatives are out front in promoting development via an organization they call the South Carolina Power Team. Development means progress for rural areas, and progress for rural areas comes with the assistance of quality power. Purchase of their power empowers the electric cooperatives and their primary production partner, the S.C. Public Service Authority (Santee Cooper), to further develop their capabilities.

The Power Team claims numbers illustrate the effectiveness of its efforts in rural areas. In a study of 291 companies, more co-op-served industries were adding jobs in 2011 than eliminating them. Industries in co-op areas employed 32,646 people and made more than $323 million in capital investment last year.

Importantly, Santee Cooper and the co-ops are not sitting still. They see the potential in rural South Carolina. They are sweetening the deal on power for growing industries.

A special economic development rate is being offered for new or expanding industries that could result in savings of as much as 20 percent on electricity costs to an industry, depending on the size and characteristics of the electric load. For example, a plant operating on three work shifts (24 hours) would benefit more than a plant operating only one shift.

The new economic development rate reduces the demand charge over the first four years after a qualifying industry begins operation. Typically, the demand charge could represent as much as 40 percent of an industry’s total power bill. The rate offers a discount off of the “firm” industrial rate, has an eight-year commitment, workforce and capital investment requirements, and a four-year discount period. ...

The emphasis on industrial growth by the cooperatives and Santee Cooper is particularly important and economically wise because the utilities provide power to much of the state’s rural area — where the growth potential is.

The job market is showing slow and steady improvement. In February, 227,000 jobs were added. It was the 24th straight month of private-sector job gains, and the third month in a row of gains well above 200,000, the best three-month stretch in nearly two years.

The jobless rate is still 8.3 percent and, at today’s slow pace of improvement, it will still take nearly five years before the economy returns to a prerecession jobless rate of 5 percent. By then, Americans will have endured nine years of employment weakness, which for millions will translate into permanently lost opportunities for wage growth and irreversibly diminished living standards.

Washington needs to do more to help. Instead, Congress seems poised to do less.

The federal highway bill, a prodigious job creator, is stalled in the House. Congressional Republicans have also consistently rejected calls for more aid to states, despite the 485,000 jobs lost by public employees over the past two years, and 6,000 layoffs in February alone. Now, some House Republicans are gearing up to demand even deeper budget cuts. Another round of budget fights could hobble business and consumer confidence and more cuts would hobble demand.

President Obama has continued to push job-creation efforts. On Friday he announced plans for a $1 billion network of regional manufacturing hubs. It is a worthy idea, but one that will require Congressional cooperation. He also said that the administration would use $45 million from existing resources at the National Science Foundation and other federal agencies to support investments in advanced manufacturing equipment and research. That does not need Congress’s approval, but moving beyond the pilot stage would.

Years into a weak labor market, and with years to go before full recovery, the scars are becoming all too apparent. Recent data from the Economic Policy Institute shows that the inflation-adjusted hourly wage of college-educated men aged 23 to 29 dropped 5.2 percent from 2007 to 2011, and for female college graduates of the same age, 4.4 percent. Joblessness and wage declines are also pronounced for those with only a high school education. For those men aged 19 to 25, wages fell 8 percent from 2007 to 2011. For those young women, the decline was 3.1 percent.

The latest job growth numbers are encouraging. But there is a very deep hole and a lot more climbing to do.

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